M/s. Abhideep Chemicals Pvt. Ltd. Versus Pr. CIT – 14, Mumbai

Revision u/s 263 - AO has not correctly applied the provisions of Section 50C accordingly his order was erroneous as well as prejudicial to the interest of the Revenue - Held that:- From the record, we found that the assessee company has sold the property and shown sale consideration at ₹ 30 lakh whereas the stamp duty value of the property ₹ 1,42,83,000/- and accordingly the Assessee arrived at loss of ₹ 44,87,519/- on sale of the residential property. While passing the order .....

perty of ₹ 1,42,83,000/ -. The Hon'ble Bombay High court in the case of Bhatia Nagar Premises Co-Operative society Ltd. [2010 (3) TMI 813 - Bombay High Court] had an occasion to consider the scope of on 50 C and it is held by their Lordships that Section 50C is a measure provided to bridge the gap as it was found that the assessee were not correctly declaring the full value of consideration or in other words resorting to the practice of under valuation.
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We can safely conclude that n .....

value of sale consideration i.e. ₹ 30 lakhs was reduced from the WDV of residential property which was ₹ 74,87,519 and in this manner the loss of ₹ 44,87,519/- was arrived at by the assessee. It is seen from sale deed that the residential property was purchased on 16.11.2003 for ₹ 1,04,47,003/- and sold during the year to Mrs. Alka B Birewar, the managing director of the assessee company for ₹ 30,00,000/ - against the stamp duty valuation of the property of ₹ .....

interest of revenue. 4. The CIT observed that the Hon'ble Supreme Court in the case of M/s Malabar Industrial Co. Ltd. 243 ITR 83 (SC) has laid down the conditions precedent by which the CIT can invoke the provisions of section 263. The Hon'ble Supreme Court has held that "if the order of the A.O. is erroneous in so far as it is prejudicial to the interest of the Revenue." It is further held that an incorrect assumption of facts or incorrect application of law will satisfy the .....

of Total Income, the assessee has added back to the Net Profit as per the Profit & Loss A/ c, loss on sale of assets amounting to ₹ 65,77,156/- as per books. The said loss is reflected under Schedule "Q" to the Profit & Loss A/ c which is on the Page 10 of the Paperbook. 7. The assessee has reduced from the Net profit as per the Profit & Loss A/ c profit amounting to ₹ 1,09,00,343/- as The said profit is reflected under Schedule N the Profit & Loss A/ c whi .....

ain under section 50 which is reflected on Page 3 of the Paperbook has been reproduced by the AO on Page 2 of his assessment order while making Computation of Total Income. 8. In view of the above, he further contended that the AO after application of mind to the above issues accepted the submissions of the assessee while passing assessment order in which he has not applied Section 50 C to depreciable assets and has granted benefit of Section 54 EC. 9. With regard to the merit of the addition, l .....

decision holds the field. However, learned AR fairly considered that In case of United Marine Academy 138 TTJ 129 (Mumbai SB) decided on 25th April, 2011 it has been held that section 50 C is applicable to the depreciable assets. 10. As per learned AR, the issue with regard to applicability of section 54 EC to capital gain computed under section 50 in respect of long term capital assets is concluded by the Bombay High Court decision dated 7th March, 2005 in the case of ACE Builders Pvt. Ltd. 281 .....

be pending for final hearing at the High Court stage in India and therefore until the Supreme Court decides this issue, the same will remain debatable. In the case of CIT V / s. Ansal Properties & Industries Pvt. Ltd. 315 ITR 225 (Delhi) it has been held that CIT cannot revise the assessment order when the AO has not levied surcharge on the amount of income tax in case of block assessment as the issue was debatable till it was settled by the Supreme Court in the case of CIT V / s. Suresh Gup .....

id decision has been approved by the Supreme Court in the case of CIT V/s. V. S. Dempo Co. Ltd. 387 ITR 354. 11. On the other hand learned DR relied on the order of CIT passed u/s.263 and contended that AO has not applied correctly provisions of Section 50C with respect to the building transfer to its Director, therefore, CIT was justified in invoking provisions of Section 263. 12. We have considered rival contentions and carefully gone through the orders of the authorities below. We had also de .....

not uttered a single word with regard to applicability of provisions of Section 50C in respect of building sold by assessee to its Managing Director. The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. The provision of section 50C contains a special provision for determining full value of consideration and as per provisions of section 50C when the consideration received or accruing as a result of the transfer by an A .....

against the stamp duty valuation of the property of ₹ 1,42,83,000/ -. The Hon'ble Bombay High court in the case of Bhatia Nagar Premises Co-Operative society Ltd. had an occasion to consider the scope of on 50 C and it is held by their Lordships that Section 50C is a measure provided to bridge the gap as it was found that the assessee were not correctly declaring the full value of consideration or in other words resorting to the practice of under valuation. Further, the decision of Sp .....